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The following data were taken from recent annual reports of Caliber Company, which operates a low-fare airline service to more than 50 cities in the

The following data were taken from recent annual reports of Caliber Company, which operates a low-fare airline service to more than 50 cities in the United States:

Current Year Preceding Year
Interest expense $50,000 $54,000
Income before income tax 425,000 361,800

a. Determine the times interest earned ratio for the current and preceding years. Round to one decimal place.

Current year fill in the blank 1
Preceding year fill in the blank 2

b. Although Caliber Company had enough earnings to pay interest in the preceding year, the in this ratio will be by the debtholders.

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